European shares closed mostly higher on Wednesday as London recovered after Britain's budget. Gains stayed limited because investors waited for the Federal Reserve's rate decision and Alphabet and Microsoft earnings.
European shares closed mostly higher on Wednesday, recovering from early declines. Caution ahead of the Fed decision and U.S. tech earnings capped the gains.
The pan-European STOXX 600 rose 0.1%. Germany's DAX gained 0.4%, France's CAC 40 was flat, and Spain's IBEX 35 dropped 1.5%.
UK budget lifts London
London's FTSE 100 erased early losses to gain 0.25% after Chancellor John Healey unveiled his first budget. He pledged strict adherence to fiscal rules and said the government kept a £15 billion ($20 billion) fiscal headroom buffer for the 2029/30 fiscal year.
However, the Office for Budget Responsibility upgraded its 2026 growth forecast to 1.2% from 1.1% and trimmed its 2027 projection to 1.0% from 1.6%, citing sustained Middle East energy costs. The finance ministry said British inflation is set to average 3.4% in 2027.
Bank results split the sector
European banks delivered forecast-beating quarterly updates, yet reactions differed. BNP Paribas fell 2.9% despite a third-quarter profit increase that beat consensus estimates. Standard Chartered surged 4.4% after lifting its full-year income and profitability guidance.
UBS dropped 1% even though its third-quarter net profit rose 8% year on year to $2.69 billion, matching consensus. Adyen plunged over 11% after management trimmed its full-year EBITDA margin outlook.
Unilever also dropped 4%, as lagging packaged-food sales and rising logistics and input costs tied to the Middle East conflict countered an upgrade to its annual volume growth guidance.
Fed decision and Big Tech earnings loom
The Federal Open Market Committee is widely expected to leave the federal funds rate target window unchanged at 3.75% to 4.00%. Trading desks will watch Chair Kevin Warsh's press conference, and the European Central Bank decides on Thursday amid sticky 3.8% eurozone inflation.
After the Wall Street close, Alphabet and Microsoft report third-quarter earnings. Any signs of cooling capital spending from U.S. cloud giants could prompt fresh volatility in European technology stocks on Thursday, given that ASML, ASM International and BE Semiconductor trade as proxies for datacenter investment.
Source: Investing.com
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